tv Squawk on the Street CNBC December 5, 2013 9:00am-12:01pm EST
kiosks where you do a lot of ordering yourself. and you wonder if it leads to -- >> you know what good intentions pave a path to, right? >> to people getting a living wage so they can afford stuff and -- >> it would be nice if it were true to be virtuous. you nationwide to check what happens -- >> and you don't get any job lows based on increasing the minimum wage. >> make sure you join us tomorrow. right now it's time for "squawk on the street." >> little china grove to get us started. more specifically, apple and china mobile. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla along with jim cramer and david faber. we'll get to that apple news in a minute. but the broader economy making some headlines here. gdp revised up to six. there's questions about
stockpiling, as well. the ten-year did pick up the 287 off just a touch now. the ecb hold rates steady. our road map this morning, the market, strong gdp claims data putting pressures ahead and sparking more concerns about potential fed tapering. >> apple is in the news for reports ooh a deal to china mobile and carl icahn is revising his call for a share buyback. >> we'll look at the winners and losers in retail. >> wow. >> first up, though, the ten-year notarizing on better than expected economic data, revised third quarter gdp up 3.6 while weekly jobless claims fell below 300k. this all happened on the 17th anniversary of alan greenspan's irrational exuberance speech in 1996. >> how do we know when
irrational exuberance has unduly escalated asset values which then become subject to unexpected and prolonged contractions as they have in japan over the past decade. >> that leads us to a good question, jim. last night, you all you did was talk about the data getting stronger which takes away the bubble argument. >> meaning we have a lot of stockholm. what do we do? i don't know. buy more. buy more. >> he had to double down on that comment, thank god. >> the rally hadn't even begun yet. >> it was the beginning of a great run. this data, yes, what we're struggling with, and i think we're going to transition to a nonfed world. it's going to take a year, but we're going to be talking about data and earnings. not there yet. but this is the beginning of data that makes me think it will she good, not just bottom line, but top line.
>> your point last night was that in the near term, those who seek good news as bad news for stocks are going to be in the driver's seat. >> you have to overshoot on the bonds. you have to go to 3.25 or 3.5 in a heartbeat and pull back to three. and the pullback will be that moment when people say, you know what? they didn't help housing. three kids under one roof and the same with in-laws. i don't know if you ever stayed with in-laws or with mom and dad, right. >> that's been argument for a whi while. if you can, you will get out. although i don't know, we'll see the latest gdp number revised, showed it came down a little bit from construction, i believe. >> i know. and there's people in the near fix. the number is good. under 300.
there's a boom happening in some parts of the country. most people okayed in texas. you start to see a pattern. this oil and gas revolution that we're talking about every day, it's starting to appear in the numbers. >> which has not happened so far. a big nice people in "the washington post" about why oil and gas has not been a big jobs driver. >> not yet, but mohawk just announced expansion of plants in dalton. i mentioned that only because you're starting to see jobs being created in the southeast. some people in texas would say, jim, look at the map. but what i see is that it's beginning. this is the largest construction project for our country, starting to really see billions and billions of dollars needs to be spent despite the export of
natural gas. they need to retrofit it all. >> i know. >> he saved the day. but you are a person of some skills, blue collar skill. chart industries came on the other day. what do they do? they make the boxes that allow you to turn natural gas into -- they're desperate for workers. they're in louisiana. that area of the country is having a legitimate boom. they're raising the price, not minimum wage. i'm talking about wage price to get any workers. we're seeing it happen. union pacific upgraded raymond james. why? mexican influx, but oil being transferred. negative article about rails transferring oil to california. >> right. >> but yeah, i've got to tell you, this is enough. this is the first time i think it's showing up. >> so your bet for the jobs number tomorrow? have you got one? >> you have to go for over 250. the over. >> no kidding?
>> for those who are going to try to nail the number, by the way. >> i'm going for the under in the saints/panthers game. if you're the over on the jobs number, under on saints/panthers. >> the panthers need it, second best in the league maybe after the niners. cam newton, it's a small market. >> meantime, apple's long awaited iphone deal has reportedly been signed. china mobile is the world's largest mobile operator, one of the few major carriers not to offer the iphone to its customers. separately, carl icahn, the billionaire investor softening his share buyback calling for the company to repurchase 50 billion in shares down from 150 billion. he is on the cover of "time." i think we're going to talk to the reporter who sat down with him for five hours. >> five hours? >> backtracking david, or not? >> absolutely.
we told people yesterday, there was an expectation he would be file ago shareholder proposal. he missed the filing deadline to include it in the proxy being sent out by apple for their annual meeting. so he's going to have to spend some money to put this in the mail if you wants to see some action on this. that is the side show. he came down from 150 billion and immediate buybacks, his original suggestion to now a shareholder proposal that seems a lot more modest, but perhaps more realistic. 50 billion over the fiscal year. we told everybody this year on cnbc before the market close. the market did not have much of a reaction to it. the fiscal year, by the way, will end with the month of september 2014. so that's what he's asking for. we should point out in the calendar year to come, this is a company that could generate well more than 50 billion in cash. >> of course, we talked about it
yesterday. >> times verizon's base. >> and everyone knows there will still be people who will buy the stock and the stock has been -- we said, listen, this is going to happen. and it will be someone who hasn't heard and we'll buy the stock. it's up seven. >> they say the rollout could happen this month, somewhere around the 18th. but having been sort of toyed with as a notion for so long, it is weird to finally see it coming if it's true. >> it fell back to that conference call where people didn't think it would be coming. jim cook has finally done a lot right after having a difficult period. there was adjustment, obviously. there was a continuation after a huge upside and people kind of felt, well, you know what? this is unstoppable and then it got stoppable. it's happening again. i think this is going to be a big holiday season here. tablet res still -- everyone tells me tablets are incredibly strong. i saw best buy with a ad today, dramatic reduction if you sign up for the carrier, but it was a
samsung feature. i think this class is on fire. you don't need china to make this story a good one. for 2014, piper is saying the numbers have to accuracy. piper is always first. i don't know if they're right. >> you have this idea of capital returns which they of course say listen we committed to 100 billion last spring, we paid a dividend, we have another 37 billion to go there in terms of buyback, but we'll revisit it next year, as well. >> your point is a good one, jim. if you were to buy back $50 billion from the stock over the next five years, which is not inconceivable, it would go a long way towards reducing a good deal of the float and potentially getting the stock up. don't forget, apple needs that stock to go up in part to be a competitive employer. it's very important to young people out there in the valleys that they get stock -- you know, if you want to recruit the best, that your stock be moving in the
right direction. >> this is a great point. >> i was with someone who was connected with google last night, a charitable trust name, and google is getting those employees. they're getting them but they're compete, facebook. i'm talking about like cal tech. cal tech is -- you have to be a real smart fellow. but that's the battle. who gets the cal tech kids? i fund a scholarship at berkeley. oh, geez, guys that come out of that, these are very smart people. there's a bidding war. >> very important. >> that's not something to -- let's move on to retail this morning. a number of retailers making news. dollar general report ed 72 cens a share for the third quarter, ahead of wall street's expectations despite a challenging consumer environment. comp sales rose 2% in november. that was below street's
forecast. and tiffany gets an upgrade at goldman sachs on the conviction buy list. the firm saying profit margins and free cash flow expansion. tiffany had a good number not that long ago. >> i didn't know how value added that call was. dollar general, i remember when this went private because they felt that dollar stokes were undervalued. then it goes public within a huge hit and another $1 billion buy back. dollar general just started expanding in california. they were not in california. california is a fifth on the country. a lot of room went the wrong way. >> upgrade to kohl's over at bank of america, calling it an inflexion year for offer net and good, free cash flow. you're not a believer? >> i like the sanoma pants and i wear them on the weekends. but i think kohl's is
undervalued, but it's been undervalued forever. you need a conns, not a kohl's. >> and aeropostale, the loss wider than expected. more discounting. another warning on the quarter. last night you said you fancy yourself a pretty darn good retail analyst, but it's too hard. >> it's too hard. i used to go with my father when he would go to visit these retailers. he would have white bags in his station wagon. he never knew who would need the white bags. i just think one operator is doing well across the street, another guy is doing badly. express is such a good company. i saw someone, down 23% yesterday. what do you do? >> do you step back from the whole group? >> i think you have to. unless you do a regional situation like conns, again, i come back to oil and gas. the country is too hard to figure. look at costco.
this stock is up ten straight points. it doesn't matter what it's does, it's going to go down. and you know costco, they're the most consistent operator in the country and their numbers are -- when the most consistent operator -- costco is great, it's a buy. but walmart, consistent operator and not consistent, although walmart stock doesn't go down. >> no. >> it doesn't go down. isn't that something? bad number, the stock didn't go down. target up most of the day yesterday. >> what is the message? >> i think that says don't overthink this. job claims, may be a good payroll number. gdp up. people are more flush, but they're shopping at weird ways. the teenagers, i don't know what they're doing. i think they're just buying tablets. >> on twitter. by the way, twitter has elected margie scar did i no to the
board. a former head of the economist group. i think a nokia director in some capacity. so a little diversity of the board. >> hewlett packard doesn't just have diversity. it's a great turn around. >> i think that's always an interesting point. we talk so much about ladies in the top office, but there you've got meg whitman and cathy lesjack and they are running that company. >> and the cfos in this country, i don't mean to be sexist or even recognize gender, but two of the best cfos in the country are women. women who are watching the show are -- or teenagers or those in your 20s, go into finance. there's jobs there. >> when we come back this morning, a live interview with ford's ceo alan mulally as the automaker unveils a new redesigned mustang for 2016.
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this will be the first mustang sold in super and in asia. in the next hour, we'll have a live interview with the ford ceo alan mulally. we'll talk about the car, talk about ford global, the things he's done to change this company, jim. and by the way, six simultaneous events rolling out this car around the world today. >> and look, ford dramatically cut the number of name plates, they cut the number of editions, so to speak, and made it so if you worked at a ford plant in europe, kind of like the same as a ford plant in america. this company was a despairit jumble of brands and one of the things that was most important was he just kind of -- alan mulally said enough of that, one ford, one ford, one ford. and his other phrase is a terrific one, which is profitable growth for all. workers, shareholders, okay, obviously this is a company that people don't understand is most technologically oriented. when you look at ford, they have done the most with the web.
they a big sales force.com platform. so alan mulally is critical to the stock. mark fields, the number two, is terrific. but i think the stock goes up every day because they think this man is going there. >> interesting write-up in usa today about it. it's still outsold by the camaro over at she chevy. they need to do something to get more women to buy it to a large degree. about a quarter of all mustang buyer res women. >> we had a 1954 original distance. >> what? >> yeah. my mom bought it. loved them. loved the mustang. >> we were big ford people. by the way, guess rememe always drove a lincoln. those were in the days when they drove tesla. gm is hotter than ford. >> apparently they've done some designing with the new chassis. they've been able to lower the roof, lower the hood, lower the
dashboard so it has more ooh a streamlined look. and as far as microsoft, the release of the surface 2. >> i thought that was amazing. this basically may just say this one is the big leap over the other. microsoft, again, just looking at the underlying things. that bomber put in place. >> or is it just because balmer would no longer be in place? >> balmer did good, double whammy. maybe balmer is leaving on a high note. >> why not? he is. 38.94. >> a 13-year high yesterday. >> it's more john elway that's willie mayes. >> i remember willie mays, very
well. he was not the player he was by a long shot. >> hey. >> probably the greatest player of all time maybe. >> really? >> yeah. i think you could win that argument. arm fielding, 660 home runs, in scandal stick park against the wind, he's 5'11", 170 pounds, he hit every ball right on the nose. mentioned one of the leaders in his all time. >> can we switch now? i have adam she hacheffler on t line. you can't play this weekend. i'm just saying. >> hey, we can talk. you have to get paid to play in the cold. that's the issue for denver this weekend. >> oh, my. >> and it is cold. when we come back, the stocks under cramer's microscope. we'll find out what he thinks about them in his mad dash. kyle bass will talk about his best on gm. we'll find out when the opening
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let's start off with brent. yesterday we talked about a downgrade, att. the flip side is what's been happening at sprint. sprint is one of the most called upon stocks, the viewers. here is a piece by n oo mura, and they've been doing quality research. ibitda, hence free cash flow driving higher. they're saying it's going to make a lot of money. >> i've talked to a lot of people. if you don't mind my touching your board here, they do not understand this morning.
>> get out. >> no, they do not. >> but this would explain it. >> they probably want to keep a currency out there for a variety of reasons. including they're hoping maybe still some consolidation will come their way. >> they have that reputation. this dan hessey i think is one of these merkel workers, not unlike meg whit man. they seem impossible. >> hardly any float there. i don't know. >> david, this is a 1050 price target. you think this is time merigold? >> i think it might be. expensive near term, it says. >> but i'm talking about why stocks go up. when good things happen to bad stocks. how is that? >> i like it or when good things happen to good stocks or bad things happen to bad stocks. >> just in terms of the single digit stocks that have worked out, you think of sirius
satellite, rite aid goes higher, new merchandise selling well. walgreens, cvs, they're doing well. i've never seen single digit stocks make people so much money. and sprint was at two bucks not too long ago. >> we'll be watching all of those stocks mr. cramer just mentioned. we have the opening bell coming up after this. [ male announcer ] once, there was a man
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with think or swim from td ameritrade. you're watching cnbc squawk live from the street. the opening bell in about a minute here. a busy, busy morning, whether it's appear sxl china, mobile, the revised gdp numbers, draghi continuing to say rates are going to be very low in europe for a very long time, swrim. >> one of the things that we need if this boom is going to continue is europe. and you can't do it alone. we had this with europe, it seems to have cooled. and i think a lot of that is france not doing that well. >> off the low, right. let's get the opening bell at
the exchange here in a moment. down here at the nyse, canfie biopharma. and over at the nasdaq, kofax. >> i was going to say kofax. >> to integrate that espn things that you're doing. this is a test. this is a test day. good news is good news. now, i said yesterday it's not going to win out yet. entries have to go higher but when they do after we get there is when we will be facing good news. >> but you say that process will happen over the course of a month. >> yeah. you happen, we had to see the quarters first. >> that could be a painful process. it could get ugly and we have to face the juice. >> i don't want to say it will
get ugly. i think if the companies really do deliver, we'll be raising numbers so the multiple won't seem all that high. this morning, on "squawk box," we heard many of the stocks we've been following are not outrageously overvalued. it was compelling testimony. >> all right. with that in mind, we mentioned some of the upgrades in retail today, tiffany, conviction buy over al coldman, kohl's over bank of america merrill lynch. a lot of small stories that might get lost. >> how about facebook? where does that stuff come from? facebook is going to be in there. that was incorrect. some of the other things, goldman downgraded from conviction buy to buy. you guys are toomey on. not down that much because i believe macy's is the way you
find out what's doing well. >> really? >> michael koors, cvh, these are macy's brands. macy's i think is still doing well. >> market rally, actually, the s seesaw action was interesting to watch. the timing seemed to be the services number, right? was a little better than expected and obviously we saw a change in the market's attitude. but if the data does get better and the taper fears build, how much of a construction do you think is built in? how far do we go? >> when you look at these dow stocks, and i just focus on the s&p for a moment, there's only a couple of stocks that i think are really linked with taper being bad. and they tend to be not the case. i mean, goldman has stalled here. people think that could be hurt by a taper. jpmorgan, they benefit.
there's this counterintuitive thing going on. i was with someone in the mortgage business who asked why do people think it's bad for the rates to go lower? that's why they make their money. there's a misperception of what gets hurt on higher rates. international stocks should do better because that means business is better. 3m has gone from 126 to 136 on a downgrade. i'm watching 3m of what could be hit. >> i know we've talked about resale of late. i didn't want to take a look at shares unchanged on the session. i want to take a look at shares of sears, not so much as sort of retail, but more focused on what happened a few days ago, which is that esp partners distributed 7.4 million of shares of sears holding to its partners. those who elected to redeem from the fund, scl got shares.
it happens. it is allowed. >> what's interesting here is when you take a look at what happened to the stock, jim, you've got shares, let's say 100 cents on the dollar is at 60 or 61 is. you're selling it today at 51. in other words, you didn't get them -- >> no, you didn't. >> taday one. and then you're left with do i sell it, do i hold it? you leave a firm and you end up having to make an investment decision. by the way, looking at a stock that's fallen dramatically since it was announced that they were doing this. >> look, i think you mentioned sprint having a tight flow. there's very few as tight as major -- it's not a major reselling cap. i think this breaks it.
>> they take auto nation, auto zone, you knew that when you go in and that's the consequences you have to face. a lot of times we talk about what kind of exposure a hedge fund has. if you give me a time over a long period, i will make you a lot of money. >> of course, he's getting paid on the fears of sears at 60. >> and he's the ceo of sears. >> yeah. >> it's a little bit weird. one thing we haven't mentioned, the disney hike. couple that with what the ten-year is doing and some of these dividend payers over time. >> boeing is going to have a 13 to 15 dividend boost. this is what people will not care about. this is the -- 2% doesn't mean
anything. watch what happens with real estate investment trust. they've been the most expensive and they've been terrible. although yesterday, they've been so terrible there's been takeovers. theori properties, a big name. got through the big crash of 1989-'90. >> it did. a historic competing news organization says they have received an offer from essex. you're right, consolidation there. that would be california, they're both california reits. not as highly valued as essex management. >> it's hard to build, hard to get permits in california. >> it's interesting prop 13 part of this whole story. >> you have to revalue and your tax rates, they're paying a very low tax rate. >> i know. i covered that as a reporter for the l.a. examiner when i wasn't
covering homicide. and i said, boy, the rich people get richer and richer. at that point, i was very involved in the unions. it was an early precursors to what happened. i led a wildcat strike once in my life. >> did you really? >> yes. i did. we got completely annihilated. >> you've done so many things. >> i was one of these protesters. you have to boycott jp stevens? i was wearing jp stevens clothes. everything i did was -- >> one man at a time. >> it was such a disaster. every time i got involved with unions, it was bad. you didn't want me in your union. >> let's get to pisani and see what's moving dow down 25. >> modest declines, moving 279% on that better than expected gdp report. electronic stocks, housing stocks getting hit more than the rest of the markets. gold getting crushed again today. mentioned the gold miners,
five-year lows that we've seen recently. i want to take up your question this morning, jim. because i think that's the right question on retailers, is this time to reconsider the whole retail group? i'll tell you what worries me a little bit. this is not about a specific company or even an apparel company. yesterday we saw express coming out and saying, guys, we've had huge promotions, the margin is not there. we're warning on the fourth quarter. three today did the same thing. aeropostale, wet seal and francesco's holdings. we all know aeropostale has a lot of problems. they haven't transitioned very well. we all know that. so this is not a surprise. but this is not an aeropostale story. they're all saying virtually the same thing. traffic was up over thanksgiving. mobile sales are good but sales are flat to down and the heavy promotions, the 50% discounts. and they're warning because they're getting hurt badly as a result of that. here is what's more disconcerting. oh, it's an apparel store.
let's broaden it out. costco, 2% same-store sales. i had to call around to check on that. this is the smallest increase since 2009 for costco. well below the expectations. i have 3.5%. this is the best operator out there. i think, jim, you mentioned that. ell brands, victoria's secret, comp stores down 5%. their own guidance was down 1% to 3%. then you go to dollar general, reported a 4.4% comp. that was also below expectations. and they guided lower for the full year. so of the retailers, i called ken perkins at retail metrics, cracks 120 retailers. here is what he said. 41 of the 120 have negative preannouncements so far and there's a dozen that haven't reported yet. that's significant and it's only four positives. very unusual skew here. this is a seasonal time to sell, but look at the breath and the
warnings we've had, look at the percentage of companies here that are down and look at what's happening this week here in some of these companies, all down rather notably. i think it's the breath of the warning, jim, that's the problem. >> this is what i've been saying. i can't figure this group out. i hate to ever just say something too treacherous. those numbers, they just make it so it's a landline out there. >> thanks, bob. let's get to rick santelli, as well, and check out the bond pits at the cme in chicago. >> good morning, carl. it isn't just chicago. if all stimulus is spongeble, then all interest rates can affect all equities globally. you know, this is kind of a dynamic that we really need to pinpoint. these are global issues. look at china, look at europe. so when i see a ten-year note, look at the two-day chart, you can see the data had an effect on it, obviously.
whether you looked at claims, whether you looked at gdp, even with private inventory distortions. it's still a womaner of a number for the moment. now let's look at that global presence. let's look at the gilt, the ten-year, the boom. if you want to look at whose economy is week, how their stocks react to the stimulus, who is going to get hit hardest? that's important to pay attention to. as far as the dollar index, we had ecb press conferences and it doesn't change the technicals. look at the two-day chart and the dollar index. yesterday goes up, today comes down. it can't make up its mind. whether it's the fed, weaker dollar, quantitative easing, strong data, but here is the chart to watch. 918. you see the dollar index? it's losing momentum. david faber, back to you. >> all right, mr. santelli. thank you very much.
it's time for the faber report. yesterday we told you the hedge fund heyman capital took a new stake in gm. joining me now on the phone to discuss that investment is the founder and managing partner of hayman capital. kyle bass, good to have you, as always. why now, why gm? >> well, i think we look through gm's bankruptcy and how it did through the financial crisis. gm's primary losses were in the american space. they continue to grow market share in asia. they have lost market share in the u.s. and you're starting to see them gain market share back. but their new product line for 2015, introduced in 2014, we think will have them take market share back from ford and chrysler in the coming years. in fact, they took a point of
market share back from ford in november alone. but why now? i think the federal government is going to exit its stake in gm. they're going to be able to do things that are shareholder friendly like institute significant dividends, buy back stock, and i think that the constant selling pressure of the government and the mandatory conversion of some of their preferreds has enormous selling pressure on a daily basis put on gm which i think will go away al as of january. so i think that given how cheap it is at roughly three times ebita, we think gm should be trading in line with ford, which means it should be trading at 50 today as opposed to 39. >> right. there has always been a pension
question at gm, certainly less towards bankruptcy. >> you take the equity cap of 60 billion and you net out beyond balance sheets. you have an enterprise stock about $47 billion. the pension liability, global rates rising, the discount rate and the pension fund take $8 billion away from their pension liabilities. we think that of the 27 billion pension liability could be as low as 17 billion the next time they report it based upon the performance of their equity portfolio and the change in the discount rate of 100 basis points, which is what we've seen in the marketplace.
when you look at that, this is valued and it's ridiculous for a company like gm is gaining market share and has a lot of wind at its back. so we just think from a battle driven timing perspective, now is the time to invest in gm. >> yeah. it's an interesting and important point you make about rising rates helping. certainly one potential positive from a higher rate environment. kyle, you know, this has become a name that seems to be a favorite among some hedge funds. and i can think about other names in the past, jcpenney, for example, that have not worked out particularly well when we see a lot of hedge funds pile in sort of when it becomes the flavor of the moment. does that concern you at all? >> it always concerns me. and look, in jcpenney, what ended up happening there was, analogous to a retail banking institution when you have, you know, 2.8 billion in
payabilities and you only have $1 billion worth of cash on hand or liquidity and the vendors decide that to change their terms like depositors running from a bank, when the vendors change their terms, it forced jcpenney to raise new money and dilute the shareholder base by almost 40%. we thought the new ceo would be able to stabilize things. what we got wrong was the fact that the vendors could change their terms very quickly. but in this case, you have gm working and pardon the pun, but hitting on all cylinders. you have to take the market share back to north america, which is one of the most profitable segments. and you have their new product line coming, which when you look at the reviews of the new product lines and motor trend giving it the new car of the year last year, i think gm is literally in the right place at
the right time right now and i don't -- i don't really care that there are, quote, many other hedge funds there. we think it's incredibly cheap and we think it is going to move tashlly higher next year. >> kyle, as always, we appreciate your insight. certainly helpful for people who want to consider gm and think about the future moves for that automaker. when we come back, ford's ceo alan mulally on unveiling this new version of the ford mustang, a 50th anniversary edition of the legendary pony car. 0
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our old setautographed by the gang. you will have one minute before tomorrow's 8:30 a.m. release to submit your predictions. jim says take the over. i think he likes 250 or better. >> yes, i do. >> this is a heavy piece of plexiglass that used do to be up on our balcony. but somebody is going to get it. >> somebody is going to get it. all these ceos that claim they watch our show, come on, put it in. >> this is how we keep ceos from escaping during the interview. >> i like that. wow, that can do it. >> we'll see. the jobs number again tomorrow, use the hashtag otherwise it does not count. in the meantime, six in 60 with jim, coming up next. ♪ like they helped millions of others.
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you're the costco expert. there's a lot of numbers. >> radian. >> the is a company that has doubled -- well, almost doubled. this is a mortgage mtg2. this is a play on private mortgage insurance. >> ubs has discovered cell gene. >> this stock has been totally doing nothing of late. it's plateaus. i think this works. >> walk us through the tesla battery news. >> tesla, the squawk about tesla, barclay's is positive on tesla. the battery system, this is the mustang. remember who tesla is. he's the alternative current guy, not the dc. >> ragen cutbacks? >> exxon, don't go against it. >> .schmucker. >> not a great quarter. wells says be careful. i saidby nut butter better,
coffee worse. i do like folgers, by the way. >> it is pretty good. >> we're serving another kind from local. >> what's tonight? >> we are doing all these ancillary plays. who is really beginning to benefit from the oil and gas revolution? how about a company that does fracking sand. here is a company that needs tons of fracking sand. that's a job that didn't exist, a sand move arounder and that's been good for union pacific. and then george skroens, probably a cowboys fan because he lives in dallas. that's unfortunate. it is. but, again, a texas bank that's doing well. remember, conn's, texas retailer, this is the beginning of job creation. it's the great untold story, even though peripherally people are getting it, it should be generic in america. >> it should be shouted from mountain tops. if all that is true and the jobs are on the way, is it a straight
shot to 3.25? >> i think it is. we had new home sales yesterday. gee, we are at a million home built. remember, we were selling at one point, we're building at many homes in the past few years and that's not correct. there is just tremendous bubble loss, construction loans. we saw from facebook, steve liesman talked about yesterday, the credit being loosened. these are all the things that happens when the economy gets better and therefore the rates must go higher. >> when we come back, factory orders and alan mulally. don't go away. tdd#: 1-800-345-2550 trading inspires your life.
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leaped over 3% in terms of gdp. what does it all means? look at the ten-year. carl, back to you. >> busy morning for you, rick. thanks a lot. our rick santelli. our road map begins with the ford mustang today. the iconic car is getting a makeover. we'll talk to alan mulally about that and more. >> jobless claims falling below 300,000 and third quarter gdp coming in at its highest level in almost two years. we'll tell you exactly what that means for the markets in a few minutes. >> and is a deal brewing in congress inspect reports say congress could be coming up with a bipartisan agreement. we'll see if a deal can get done. >> also ahead, carl icahn is available now on a news stand near you. the billionaire investor is on the cover of time magazine under the headline master of the universe. we'll talk to the author of that "time" article later this hour.
nearly 50 years after its launch, ford is unveiling the latest generation of its iconic mustang car. here to show us the new mustang is ford's alan mulally talking to our own phil lebeau in new york. as "usa today" put it, phil, the mustang still looking hot at 50. >> it's iconic, no doubt about it. and here is, along with ford's ceo alan mulally, joining us in new york, you've been waiting a long time for this. i know how excited you are about this. the one topic that's out there right now regarding you and the future at ford has to do about whether or not you were talking with microsoft about the ceo position there. have you been approached, either
by the microsoft board or by representatives at microsoft about taking the ceo position there? >> phil, i am honored to serve ford. we have no change in my plan. >> i understand that. but you didn't answer my question. have you been approached? >> i did answer your question. i am honored to serve ford. there's no change in my plan and we don't comment on speculation. >> a lot of people here say we understand you're committed to ford. i know you're frustrated that this is out there. why not come out and say i'm not a candidate? >> phil, we don't comment on speculation on any of the rumors out there about any subject. >> let me move on to what other people are looking at. >> mustang. >> which is mustang. the future of ford. the reason the topic of microsoft is coming up is your future of ford. you've got a clear discusson plan in future in place whenever you leave this company. but a lot of people say without alan mulally ford is not as
strong. >> i think ford is in great shape. we have a fine management team, a great system of managing the company and i think the mustang is another proof point of ford's ability to deliver cares and trucks to people who want value. >> is it still a halo car? >> absolutely. when lee iakocha introduced this car at the world's fair in 1965, it changed the world because it it was first time you could get a sports car, rear world drive, all the performance, all the utility with the trunk and have it be affordable. now we are reinventing the mustang again to provide that and provide it to everybody around the world with right hand drive and left hand drive. >> let's walk around. as we do, let's talk a little bit about this. the front you like because it says to you punch in the face. >> clearly, look at the stance that it has and look at the message it delivers. especially the trapezoidal rail
that leans forward. you like that eyebrow? and look at the lines here and the strong shoulder. tremendous shoulder. two plus two seating, the trunk, your choice of three different power systems so you can get a five liter, a v-6 or an eco boost engine on an inline ford. >> but people look at what used to be the pony car and it's clearly not the pony car any more. but they look at this and they say these are niche vehicles. can niche vehicles still move the needle? >> oh, absolutely. henry ford's original vision was to have a full family vehicle to serve all the segments. this is a tremendous segment. we love supporting our customers. and, of course, this vehicle here, now for the first time is going to be sold worldwide. people have been waiting for
this vehicle. now our one ford plant can deliver what they really want. phil, the pony is being let out of the corral. >> that's a line your marketing people have been working on for a while. >> i love that line. >> what's your vision when you look at next year in terms of the auto sales and the demand out there on the market. will we spend next year seeing auto sales over 16 million? >> it's clear to happen. clearly a strong year for sales this year. strongest year for ford since 2004. our forecast year-end is probably 15.9, maybe 16. the economy is growing slowly, but we're recovering from the deepest recession is we've been in. if the economy moves from the 1.5% to 2% on gdp -- >> and today we heard gdp at 2.3%. >> that pent up demand where that average vehicle is over ten years old, any of our new vehicles from ford, you can economically out -- your new
vehicle. >> but at the same time, you are pulling back a bit on your production of fusion, you're seeing more incentives from your japanese competitors and there are concerns out there about transaction places. and a lot of people are saying have we seen what we would consider the peak, at least in the near terms in terms of auto profitability? >> i sure don't think so in ford's case. as you pointed out, the basis of our whole production system has been to match our production to real demand and not overproduce where we have to discount the vehicles. and we have led that for seven years. as you pointed out, we're going so decrease production slightly. clearly, the most important thing is we match the production to the real demand. that's near term, but overall to your point, i think we're going to expand through 2014. >> the big discussion in the country going on right now, specifically today, is whether or not the minimum wage should be raised. and the argument for many people who say it should be raised is you live them a living wage, people who can make $15 an hour
instead of $7.25, they will be able to afford that first automobile. have you done any research looking at whether or not raising the minimum wage would bring more people into the auto industry in terms of buying? >> i have not seen the proposals which were described today. but i think to your point, it's really important and as you have covered, what we have done with the uaw to restructure our business and have competitive wajsz and competitive benefits is a reason why now in the united states we're able to compete with one of the best companies in the world. the explorer in chicago is going to go to 94 countries around the world. i think everything we look at ought to be looked at through the lens of competitiveness and ensuring the united states factory base can compete. >> whether or not somebody working at a fast food restaurants makes $15 versus $7.20, you're not sure how much that will improve auto sales? >> i think the most important thing is the u.s. is competitive
and we're able to compete with the best in the world. that is the ford plan and we'll continue that. >> alan mulally. >> mustang, the pony has been let out of the corral. >> that has been drilled into you. >> one more, an american icon, a global passion for it. >> there you go. in your future career, whatever it might be, let us know because we want to find out what kind of markets lines you have lined up. >> phil, you got the back slap and everything. that was the full-court press. what a great interview, phil lebeau with alan mulally introducing the 2014 ford mustang 50 years after the debut. let it be said phil gets to the point. you didn't answer my question. i did, no change in plans. >> those are always difficult interviews. a great ceo, great looking car, by the way. but the news people want to focus on and as phil went right at it is whether or not he is being considered for or will
consider the microsoft job. i don't feel like we got an answer. that was a nonanswer, clearly. >> microsoft is up 1%. >> i don't think he's changed anything he said in any way and he did not answer the question directly. >> you simply repeat the message. it's like jack welsh. how could he is here is a mustang, by the way, i might be off to microsoft? >> he's not going to say that, but phil asking him directly why not put it to rest and it's easy to see i will not consider nor lig to any company to -- >> well, he would not answer that. >> he answered the question. >> i like the car, though. i'll tell you that. >> the car looks nice and mulally looks great, too. what a salesman. you have to hand it to him. can it be? is there really bipartisanship in congress? believe it or not, we are seeing some signs of progress in budget negotiations on the hill. what will it take to get a deal actually done? we'll talk to republican diane
black and democrat john yarmuth both involved in those negotiations. the dow is up slightly, six points. is it africa? the middle east? canada? or the u.s.? the answer is... the u.s. ♪ most of america's energy comes from right here at home. take the energy quiz. energy lives here. (announcer) at scottrade, our cexactly how they want.t with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade.
estimate for the full year, so conn's one to watch today. >> thank you so much. meantime, the dow continues as it has in the past couple of days, seesaw action as the data comes in, cold in some cases, hot in others. claims very good today. the low is 300,000 at 298. gdp revised up to 3.6. number that hot, go back to q1 is at 2012. >> that question is to weather you built on the 25% rally you've got on the s&p with what you assume the fomc will do or whether that then becomes challenged. a lot of talk on the santa claus rally. meanwhile, shares of apple are up this morning on news of a potential deal with china mobile. let's bring in brian white, managing director of technology hardware and software with fitzgerald equity research.
advised with a $777 price target. good morning. i'm not clear, is the china mobile deal done? although it's in the journal, i thought i saw a denial from apple that they've got there yet. >> so there's no official agreement yet. this is something reported by "the wall street journal." what we've said all along is that, you know, for apple to really do a deal with china mobile, you need a 4g network, you need 4g licenses. licenses were given out yesterday. so i think this is the catalyst. whether it's in december or, you know, shortly thereafter, the deal is going to get done, in my view. >> the analysis, and i take it from the article as to how many phones might be sold in china, is only 20 additional -- 20 million dashls phones a year, which is 17%, 18% from where we are now. is that a game changer? is it worth as much as the u.s. who might follow through design content? >> i think the big opportunity here, we called the mobile
internet in china one of the tech wonders of the world. because they have 1.2 billion mobile subscribers. we're still in the baby stages. 3g penetrations are like 32%. china mobile itself, 750 mobile subs. apple, believe it or not, already has 35 to 40 million iphone users on the china mobile network without an agreement. so we think for apple it means about 20 million to 24 million i phones in calendar year 2014 and that's about $4 at eps. but that's just the beginning, just the beginning. >> what comes next? tablets? itunes? people buying songs over there? what's the beginning? >> i think it's just the penetration. 3g penetrations may be a third of the market in china. ultimately, some of that may be 4g.
>> it's up to 150 billion now, he's aiming for 50 billion. what sort of support do you think carl eye can can get to put that before a shareholders meeting in february? does he stand a chance to change the offering? >> i am glad carl icahn is on the case. i dealt with him a lot on other companies. and this stock, you know, if you buy back stock at 50 billion at 7%, 100 billion, we did a dcf model. if you have no growth at apple for now until the end of time, stocks are worth about 640. you have 2% growth, you get to our price target. >> what do you think it can generate in the next calendar year, do you think? >> i think they're good for about a 45 billion cash flow in the last year. look at the discount, free cash flow in other ways. relative to the s&p, the multiple shrunk 60% in six years. apple has grown 43%.
s&p has only grown 4%. it doesn't make sense. so having carl icahn pressing this issue, i think it will polish apple's valuation. >> good to see you, brian white. >> thank you. >> in the meantime, activist investor carl icahn wants apple to part ways with some of that horde. this week's cover magazine features the investor. ronna, good to have you with us. good morning. >> good morning. thanks for having me. >> a five-hour interview, it's not just about apple, though. >> he has a lot to say. >> it's also a deconstruction of the activist trend that he clearly personifies. where do you think he fits? is he the king? >> well, he's certainly the most vocal. he has a very big microphone and he's taking on the world's
richest and most beloved company. i think it reflected that shareholder activism is at a peak that we haven't seen in many, many years. one of the reasons this is happening is the big institutional investors are very concerned about longer term earnings and share prices and growth. they want stock price toes stay up. they're putting more money into hedge funds and alternative investments and in some cases activist funds. >> you make a lot of comparisons between today and you call them the roaring '80s. even icahn talks about the disheses as to what motivates him now versus back then. how has he changed? >> as you know, back in the '80s, it was all about hostile takeover b with b it was about coming in and buying companies. rule changes have made that harder to take ownership of a company outright. but it's all about getting a voice, getting board seats. i think that's the second ewe already change and something that icahn is very involved in
in the last few weeks here. he's had three companies come in and voluntarily give him board seats. whether or n whether or not that is because they're worried or they feel he has something to say to help earnings is a question. i think you'll see a lot more of that. >> ronna, it's fascinating to see how strongly he comes out about the market direction. >> yes. and i think you're hearing that from all of the big investors right now. everybody is worried about this market. as he told me, the market is going to break. he's seen it before. it will happen again. nobody knows when, but this is a guy who is very well hedged. >> finally, ronna, do you consider him a barbarian, so to speak, the way we used to talk about him? >> well, you know, just thinking about carl makes me laugh. i think that he is an extremely persistent and aggressive guy. i wouldn't necessarily want to be on the wrong side of a deal from him.
but he's a super smart guy. he has a lot to say. and i hope investors and companies are listening. it's an important point in the market right now. >> it's a great read. thanks so much for your time. >> thank you. >> ronna joining us with the interview of carl icahn, master of the universe on the cover. up next, promising news on the budget negotiations in washington. we'll hear from a democrat and a republican with their take on where things stand in their committee right now. ♪ i want to spread a little love this year ♪
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negotiations for a two-year long budget deal, but will they come to a compromise? joining us this morning, two members of the house budget committee, congresswoman diane black, a republican from tennessee, and congressman john yarmuth, good morning to both of you. >> good morning. >> congresswoman, they're talking about the ryan-murray deal. people trying to put some odds on a deal, on senate passage, on house passage. where is your head on this? >> i am still hopeful. we're in negotiations and the talks are going well, but we're fought going to make any betts
on that just yet, but we were very hopeful. >> happening faster than you expected, congressman? >> well, i think that it is moving along. let's just say it that way. and i'm happy that we're able to get to the table and actually have this conversation. getting back into some semblance of regular order around here at the capital it's odd to see the two of you smiling. we haven't seen a lot of smiling on the hill in recent weeks. >> no, no, the problem with that is this has been a two-person negotiation. this has been patti murray and paul ryan. our democratic -- haven't been part of the discussion. so in terms of getting a sense of whether there's a deal brewing that can pass both houses, we don't have enough information at this point to know. all we know is they are moving closer and closer together. >> congressman, can you explain to us all exactly what is happening here and what is at stake? we've got $90 billion of automatic spending cuts that kick in next year and to do the deal over two years, they need
to agree 180, maybe 200 billion of spending cuts to negate that. the information -- and you will know this better than i -- is that they are going for a much smaller deal, maybe 40 or 50 billion. congressman, if they do a 40 or 50 dollar bill, does that neutralize what is at stake? >> that is what's at stake and that's what i know patti murray and paul ryan are trying to do is basically negate the -- across the board cuts with the see zest ragz, which will be deaf state to go our military next year and it's already been devastating to many of our domestic spending initiatives. that's what they're trying to do. and i think they can probably agree on a number. the question is, what do you do to get to that number? and where r cuts going to fall? >> and congresswoman, if question becomes if it is a small deal, say 40 billion or 50
billion, will house republicans vote it through? what are your colleagues saying? >> we have to do something about our spending. but this is not a good way to operate. we need to operate with a ca scalpel. as dr. immeldorf said, any step is a step in the right direction. i'm hopeful that we are going to get a consensus with this. >> congressman, is the speaker better positioned to shepherd a deal into full passage this time around or not? >> i think so. because i think both sides are very much interested in avoiding any kind of shutdown or threatening the credit of the nation. so they saw the republican -- the fallout to the republican image during the shutdown crisis. i don't think they want to repeat that and i don't think they want to repeat it, either. >> i don't think the shutdown is good for anyone. it was good for the democrats, it's not good for the republicans, but most importantly, it's not good for the american people. >> appreciate your time today. we'll obviously be watching
closely. >> thank you. we've got quite a shock at 8:30 this morning. third quarter gdp growing at 3.6%, the strongest growth rate since the first quarter of 2012. so why isn't the market rallying on the news? well, you know why. because it all -- that question as to whether the fed will taper. that's next on cnbc. i love having a free checked bag
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breaking news from the natural gas, down. the five-year average, it was almost three times as much as what we saw last year. as a result, we're looking at natural gas futures that are spiking here up more than 12 cents. and above that $4 mark for sure. we're looking at a situation where, in addition to the fact we had below normal temperatures last week, adding to more draw from stores, we're anticipating with the storms that it is going to be in the western part of the country that over the next week or so we will see below-average temperatures once again. so we could see another big withdraw from storage coming up in the coming weeks. keep in mind as we look at this
price, we are looking at the highest price we've seen in quite some time for natural gas, $4.08. back to you. >> thank you very much, sharon. the stock market is down now for a fifth straight session. the latest round of data fueling concerns that the fed will taper sooner the rate at which it brings money and forces cash into the economy. let's bring in cnbc contributor allison dean, senior adviser with barrett asset management. michael feroli is with us, chief u.s. economist with jpmorgan and the federal reserve and our own steve liesman joins the conversation. steve, in a nutshell, how strong is the data we've seen so far? >> you know, it's been mildly to the upside. we're getting reports in. we had that huge blowout revision on the third quarter growth of 3.6. economists are taking it off their forecast in the current quarter. morgan stanley righting now,
saying they're taking down their forecast. steven stanley says he thinks the fourth quarter could be flat as a result of this number. so don't be disguised by this number, simon. it looks really strong. but i don't think it's going to continue into the fourth quarter. >> okay. let's cut to the chase here, guys. we are 24 hours away. now less than 24 hours away from the employment report. .this may well be the calm before a big trading storm into the year-end. either we're going to rally or tentatively we're going to challenge this 25% gain that we've had so far on the s&p this year. alleyson, i want to break down this conversation into two parts. the first is what are the chances do you think that the federal will order a taper in two weeks time? >> i think pretty close to zero. i've known janet yellen and her view on employment. i think employment has to improve significantly. i think the fed is going to wait until the first quarter, possibly second quarter of next year before they start to taper. >> michael, what are the chances
the fed starts to taper in two weeks? same question. >> i think they're low. i wouldn't say zero. i think we would have to get a blowout number tomorrow for that to happen, maybe something like 250 or greater. beyond that, they're going to see more evidence of recovery in the housing market. we're looking at january as our baseline expectation. baseline data perhaps to get to december. >> my second question is, when they do announce the taper, what will be the effect on the market? some believe the majority of this rally has been driven by excess liquidity provided by the banks. if that liquidity becomes less plentiful, then lower prices will result for stocks in particular. mike, do you agree with that? >> i think the markets come to take it with tapering. we have learned about this long enough. i think the fed has done a pretty good job of distinguishing tapering from tightening. by the time this actually happens, i think the adverse impact on the market will be short lived.
i think we'll get back to thinking about -- if they are tapering, it will be an environment of better growth. >> simon -- simon, i don't get that at all. there is so much excess liquidity out there, it's like saying you take a couple cupfuls out of an overflowing reservoir that somehow the level of the reservoir measurably declines. $4 trillion is on the balance sheet of the federal reserve. if it's excess liquidity fueling this market, then that same person has said they expect a riegz market for years to come because that excess liquidity will be around for a long time. >> that's because you take bernanke's view of -- >> i'm taking the guy on the face of what he said. if it's rising excess liquidity, that's a different story. but the pool of excess liquidity is large and not going anywhere anytime soon, simon. i can guarantee you that. >> allison, you are all
professionals and cling desperately to the valuation argument. is that -- does that actually pass the smell test? monuments this week there's a disconnect between what happens in markets that we're in and the rest of the economy is frankly embarrassing. >> well, you know, if you look at the stock market going back in time, it has a lot more to do with corporate profit growth than directly the economy. that's been separating over time with corporations that have become much more global where gdp is largely focused on domestic product. so i think at this point, almost half of revenues are driven by external, outside of the u.s. demand. >> it's a very a.m. academic view. didn't the fed force everybody into this market because it rammed interest rates to zero? if they move back on that, doesn't it fall out of the equity markets? >> well, i think there is a risk in the short-term that the fed starts to pull in liquidity. however, the reason why they're doing it is probably because the economy is getting stronger, the global economy is getting stronger which should translate
into better corporate profit growth and the "e" in pe starts going up. so if it happens at a time when you're seeing better employment, better economic activity, translating into better profitability and corporations regaining confidence. corporations are sitting on a lot of cash. they could start reinvesting in their businesses. that could be a stock that in the longer run makes the market more attractive. >> simon, you posted a world that was at equilibrium before the fed acted. and the notion that this entire market is based upon people being forced into equities kind of ignores the notion essentially that people were not in equilibrium, portfolios were in a risk avoidance state. >> i'm not saying that. but i think the fact that the fed is feeding cash into the economy has to mean a higher stock market. and when it doesn't do that, out must surely mean a lower stock market. >> but where is equilibrium? where is the right place for
portfolios to be balanced? >> that's what the conversation is about. michael, the last word to you. >> low interest rates is right and as pointed out liquidities. the fed can pull back on asset purchases. i don't see the impact it will have if they're successful in keeping about interest int rates low and demand high. >> tomorrow we'll have the employment report and they will be lots more to discuss. thank you for your time. in the meantime, china is cracking down on bitcoin. beijing is babbing chinese banks from using bitcoin, warning the digital currency is being used for criminal activity. >> the bank and other financial authorities saying their notice is being taken to protect the value of the yuan and reduce any threat bitcoin may pose to financial stability. the translated version of their
statement says ordinary people can use it at their own risk. chinese demand and acceptance by large chinese firms, along with statements by public officials here in the u.s. about bitcoin's potential are behind a huge increase in bitcoin's price over the last two months. now, today's news out of china causing bitcoin to drop by $400, one of the many exchanges where it trades it has rebounded. george mason university downplays the long-term impact the news from china will have on bitcoin saying it's unlikely to have impact on that currency. they feel it will have a chilling effect on the nigz's bitcoin linked economy in china, providing an opening for u.s.-based bitcoin to step in and profit from the currency's popularity. their price is limited, price is set and they're backed bay central bank. they've attract add dedicated
following. but with questions about its val continue to dog it. currency strategist david wu seeing it as a source of payment into the future and still questions its ability to replace the currency. >> thank you so much, mary thompson. take a look at this, carl. this is puma biotechnology. the company reported positive data from its phase two clinical trial for an experimental drug to treat breast cancer. puma now has a market cap of $52 billion on that move. certainly shares to watch, simon. back over to you. >> thank you very much, dom. up next, fast food workers are set to walk off the job in 150 different cities today, protesting what they call wages that are simply too low.
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workers in about 100 cities are set to walk off the job today in what could be one of the biggest efforts yet to push for higher pay at minimum wage jobs. nbc's katie kerr is live in brooklyn with more on that. katie, good morning. >> reporter: good morning, simon. they're hoping it will be thousands of people across the country doing this walkout. they'll be here in brooklyn around 111:30 this morning. hoping to get $15 an our up from $27 $7.25. it's estimated most of these workers are over the age of 28 and most of them are women. a lot of them say they work two
jobs, they can't afford the basic necessities, they can't afford to feed their families. many of them say they can't get full time work in a lot of these places because they're capped out at $35 an hour. there were a lot of protest bes this earlier this summer. it seemed like yesterday they got a big boost from president obama. >> last month, voters in new jersey decided to become the 20th state to raise theirs even higher. yesterday, the d.c. council voted to do it, too. i agree with those voters. i agree with those voters and i'm going to keep pushing until we get a higher minimum wage for hard working americans across the internet. >> president obama supports a $10.10 on minimum wage. certainly never mind $7.25. any sort of rates for their workers would end up getting passed down to the consumer in
the way of higher prices for food. there are no hard numbers on this, but a burger would go anywhere from $3 to $3.50. that's the big debate. how big of a deal is that if the price of a burger goes up 50 cents? a lot of labor experts say it's not that big of a deal because a lot of these fast food workers use about $7 billion in social services a year. if they need less in those social services, you'll pay less into those social services, basically raising the bottom raises the whole. the protests are scheduled to start around 11:30. we'll see how it goes. >> katie, thanks so much. our katie tur. dominick has a special retail story. >> let's check out what's happening with francesco's. you can see there right now, certainly not a good story for
those ipo investors. back over to you. >> thanks a lot. i want to turn our attention back to bitcoin. this morning, bank of america releasing its first ever coverage note on the currency. we'll is he you exactly what they had to say in just a few minutes. [ male announcer ] what if a small company became big business overnight? ♪ like, really big...
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with the down down now 62, let's bring in rick santelli. >> thank you. must be okay with this, as we see data, and, yes, we could argue about all of the nuances of the data. from a snapshot perspective, i don't think the stock market is down because it's looking at the nuances of inventories versus the dropping consumption. maybe that figured in a bit. we all know it's based on the fed. . and every time i think of the fed, i guess, unfortunately, i think of the "saturday night live" skit, rose anna dana, the late gilda ratner. it's always something, and it is always something. as we debate the tragic comedy skit about what's going on with the stock market, there's always
going to be an issue. i think the fed will always find ground cover that something isn't quite perfect. that's always one of the by-products of mike row managing. you know, it seems as though it's the stories about the s.e.c. and piano teachers, or what's going on with the fed, and once they get inside this giant mousetrap of an economy. and it's on a global scale. but they will always find something, because i don't think they're going to look up one day, "wow, everything is perfec perfect," whether it's labor force participation rate, the unemployment, or the starting gdp. and another issue. everybody is debating whether or not the stock market is a bubble, and i would harken back to the 1640s with regard to the tulip bubb issue, and the fact that we had to look at at some point in our college careers, i think written many years later, popular delusions of the madness of crowds. but there is a difference here. and the difference is, you know,
just because a bulb, a special bulb back then in the 1640s sold for what was equivalent to five acres of land, the difference is it isn't just the crowd. the fed is fuelling the crowd. see? whether what side of the trading card you with, pronagonist, or antagonist, the did you lugs of what's going on in stocks. how will it end? all of the m.i.t. models that say, you will create liquidity. they did. the human element doesn't seem to be captured in the models, and that's the -- the human element -- that will be the light at the end of the tunnel that's perhaps a train. how can we hear the signal? i think the 2.85 10-year, on the way to 3.0, 2.92 guild, on the way to 3.these are things you want to pay attention to. simon, back to you.
>> thank you very much, rick santelli. do you want a chance to win a piece of cnbc history? you can as long as you nail the number. we'll talk about that after a break. t the toaster cozy? yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence. that's what ameriprise financial does. that's what they can do with you. ameriprise financial. more within reach.
the street." we told you earlier this week about that edward hopper painting that could set a record? well, it just did, and then some. christie's bringing down the hammer on edward hopper's "east wind over weehawken." it was expected to sell between $22 million to $28 million, and sold for $40.5 million, an all-time high, which used to be $26 million, one of the top sellers for american art. carl, back to you. >> he's my favorite. i'm glad to see the value going up for hopper. that's wonderful. thanks, robert. >> sure thing. a lot of you may remember prior to our move to post 9, "squawk on the street's" home on the nyse was up there. at that balcony overlooking the trading floor. and with that in mind, we have the perfect prize for a cnbc junkie, you know who you are, who can nail the number on the jobs number tomorrow, just tweet your predictions for november non-farm payrolls for a chance to win a piece of our old set, which simon has right now. [ laughter ] simon doing the "price is
right" -- >> yes, it's what used to go along the edge. it's sharp. >> yeah, careful. >> it's kind of -- >> don't hit me. i'll hold it -- i will hold it as well. >> signing at this moment. there you go. >> can't see that worth a darn. >> we thought edward hopper was worth money. >> wow. >> so all of the greats, of course. all of the cnbc greats. >> not sure mine can show up. >> maybe we'll give you a glitter pen. >> all right, nice. well done. >> yeah, happy to help. >> sure thing. >> we'll get david some spray paint. >> yeah. hopper is your -- hopper is your favorite artist? >> yes. oh, yes. >> special. >> yes. so use our handl handle, @squawkstreet, #nailthe number, you have until the 8:30 jobs number tomorrow to submit your predictions. we talked about kramer going on the over, i think 250 was his pick. we're seeing a lot of them coming in. i think the low that i've seen this morning is about 193 or so. so we'll see. as you said earlier, simon, it will be an important number
either way. >> yeah. it's whether we rally into year end or challenge the 25% gain on the s&p. though arguably we talk about it -- so many people don't think they'll taper in december, like it's a nonissue. alison was adamant, no. >> a zero percent chance, i know. makes you wonder why the dow is down 56 today for the fifth day in a he ro. the s&p back down to 1786. we'll see what the rest of the week brings. in the meantime, if you're just joining us, here's what you missed earlier on. ♪ >> announcer: welcome to "squawk on the street." here's what's happened so far. >> i just don't see whether it's the enthusiasm investors, mutual fund flows, where institutions are positioned, hedge funds, net log exposure, there's no cohort hog wild in this market. but to suggest it's a bubble ready to burst, i think is a stretch. >> our second look at third quarter gdp is off the charts! out of expectation range!
3.6. claims moved under 300,000. >> we should point out in the calendar year to come, this is a company that could generate well more than 50 billion in cash. >> this deal's going to be a -- [ laughter ] >> seven times verizon's base. >> and everyone knows there'll still be people who will buy the stock. [ laughter ] the stock is some -- we said, listen, this is going to happen, and someone that hasn't heard, and they'll buy the stock. it's up seven. >> yeah. [ bell sounds ] >> if you wanted to end the speculation, and i know you're frustrated this is out there, why not come out and say, i'm not a candidate? >> we don't comment on speculation, on any rumors out there about any subject. >> the front you like, because it says to you, "punch in the face"? >> well, you know, clearly, look at the stance that it has and the message it delivers. >> announcer: the "squawk on the street" countdown to christmas is in full swing. ho ho ho! ♪ it's the most wonderful time of the year ♪
♪ where the kids welcome to post 9 at the new york stock exchange, and more losses today as the data comes in strong, whether it's revised q3 gdp, and fed taper fears are in full effect as the s&p is down to 1,785, down 7 points. dollar general is the biggest gainer, up more than 4%. the retailer posting better-than-expected quarterly earnings and raising the low end of the full-year guidance. and the 10-year this morning, once again, the daily ritual, 2.864, off the highs of the morning. but in the view of a lot of people, kelly, it's a straight shot to 3%, if not beyond. >> i wonder if the people had a closer look at the gdp report. we'll get into that coming up. here's the roadmap for this hour. more buzz over bitcoin. strategist from pibank of ameri saying it has clear potential for growth. he'll join us, and you'll want to hear about china going thumbs
down on bitcoin. apple's long awaited iphone deal with china mobile has been signed and we'll explore what this could mean for apple, its competitors, and the company's stock. l.a. lakers kobe bryant looking to score by launching a new nike show. you'll want to hear what he had to say to jane wells coming up. bitcoin used around the world. china is moving to ban its bank, saying money laundering is an issue and raises the threat of financial stability. bank of america put out its first research note on bitcoin titled "fit coin. a first assessment." david joins us now, and good morning. >> good morning. >> you know, you call it a first assessment, but if you read through to the end here, it sounds like you're saying, yes, bitcoin right now could be in a bubble. >> yeah, i think so. that's exactly it. i think there's two questions -- one, is bitcoin going to be here to stay as a currency? i think the answer is probably yes, because i think as a medium exchange, it definitely has a lot of advantages.
however, the second question is, does it have that much more upside in terms of the price appreciation? having gone up so much for, you know, this year so far, our big -- the analysis suggests the upsides will be more limited from that point of view. >> david, how can you look at the price relative to fundamentals for a bitcoin, when even though there's, you know, people out there saying the supply is ultimately limited, you know, bitcoin can be modified? the rules can be modified by the bitcoin community. so how do you figure out what the supply is and, you know, extrapolate from that what the price should be? >> that's it. that's exactly -- that was the challenge for this whole analysis, because in many ways, bitcoin is like a multihead animal. it's got many different purposes. you want to basically -- you want to break it down into three pockets and trying to basically value them independently of each other. so the first part of bitcoin, i think, is about mean of exchange, especially for ecommerce. so we assume that what if bitcoin were to become, i don't know, say 10% of all ecommerce,
b-to-c transaction, how much of that is worth. we came to the conclusion of about $5 billion in terms of market cap. the second question, when will it become one of the top three providers of money transfer, a major -- actually an advantage that bitcoin offers, we came to the conclusion that will probably add another $5 billion to bitcoin's market cap. and finally, what about bitcoin as a store value? we decided, you know what, probably the closest thing bitcoin can become is something like silver. if it's like silver, it will give you $5 billion in market cap. >> that's interesting. yeah, so it's almost more of a top-down strategy looking at the value of other kinds of services or goods that perform similar roles, and using that to imply value. as opposed to just a supply-and-demand argument? >> exactly. i mean, even if they -- you know, we've never seen anything like this before. so you have to basically look at this thing out of the box to be able to reach some kind of fair value notion. i think clearly the market's very much in need for fair value
assessment, because i think otherwise you don't know how far this thing can go. i think from that point of view, that's why this piece has resonated with a lot of investors. >> what about this move in china, for example, to ban bitcoin, given some of the concerns about fraudulent use, and, also, some of the worries people have longer term about this drawing more hackers who are able to just exploit the system? i mean, i know you're not recommending whether or not bitcoin should be adopted, but from an investment point of view, are those major risk factors? >> oh, there's no question. i think there's no question that i think bitcoin has some inherent risks. but i think we also have to recognize the fact that bitcoin does have a role to play in countries where its citizen phase are the high taxes, capital controls, or for that matter, high confiscation risk. so i think from that point of view, i think this is why china, for example, has capital controls, has seen massive broad demand for bitcoins. that said, i tend to disagree with those people who think bitcoin will become a major currency of choice for drug
dealers and the underworld in general, and that's because, remember, all bitcoin transactions are publicly available. and every bitcoin actually has a digital history that cannot be easily altered which means the criminals and drug dealers will not cover their tracks easily. from that point of view, i don't think it will be a big story in the underworld, even though it might be a bigger story in the emerging market countries. >> if that final $15 billion market cap is a value you can reach, what does that imply for the value of each bitcoin here today? >> it's about $1,300. >> okay. >> per bitcoin. i want to say, this is the upper limit, right at some sort of a lower limit for sure. okay. >> david wu, first assessment of bitcoin. i'm sure there will be more to follow. thank you so much this morning. >> thank you. in the meantime, tech giant apple and china mobile have reportedly signed a deal to launch the iphone 5s on the world's largest network. the announcement is expected december 18th, alongside an unveiling of a 4g network.
let's talk to jon fortt about the news that people have been waiting for, if it's true. >> yeah, we're still waiting. china mobile denying to cnbc that the deal is signed, apple not commenting. maybe china mobile waiting until you said until the 18th. but it's interesting. gene munster is out with a note early this morning saying he expects the china mobile deal to add around 17 million units to the iphone. in 2014. that's a bump of about 5%. it would be nearly 10% of china mobile's 3g subscriber base. they have around 176 million 3g subscribers, which is a staggering number. compare that to the size of the u.s. population. it could be a nice big bump if apple gets good penetration among that group. >> right. any worry about margins here, if -- i mean, we don't know exactly what china is willing to pay for an iphone these days. >> a little bit. gene thinks around $525 average selling price on the iphone versus closer to $550 or higher in the u.s.
so some price pressure. we don't know exactly how much the chinese population as a whole is willing to pay, but there are certainly lots of people in china who are able to pay that much and more as we see in the effects on the real estate market here, talking about all of the time. >> this has been, to some extent, a story about the sort of wrong moves by china mobile, you know? there are others trying to unicom, china telecom, had the iphone for a while, and some on the 2g, they weren't allowed the 3g, and now on 4g, so from apple's point of view, what does that imply for widespread adoption of the iphone now that china mobile may finally be joinsing the count here? >> it would help to probably have the overall acceptance of china mobile being official on that network. the marketing would certainly help with that bigger group. china mobile's got maybe a lit more leverage than some other
carriers have, because apple is counting on china. tim cook talks quite a bit, or at least he had until the past couple of quarters, about china as a growth engine, and everybody is looking at china mobile as a catalyst. there probably hasn't been one factor, one company that people have been looking at as a catalyst for apple like this, since verizon in the u.s. years ago. so they're in a position to maybe not have to pay the same kind of subsidy toll that other carriers have paid. of course, we'll see maybe what the terms are when this deal actually gets public. >> yeah, speaking of that, let's bring in alex, senior research analyst, managing direct director at jmp securities, and no target. good to see you again, alex. >> thank you so much. >> he talks about china mobile being a catalyst. is it for you? >> it's certainly something that's already been a degree baked into expectations for apple. it had been down greater earlier. and as the china mobile built, you've seen apple perform in a commensurate way. what's interesting, and i didn't hear you mention this on the show earlier, is that there are
already 4g phones now being offered. can you go to the china mobile website, see eight phones being offered -- the samsung galaxy note, being subsidized with a free giveaway with a plan, and we haven't seen apple offered yet. so a lot of unknowns still. >> what's your range estimate on what percentage of china mobile's 3g/4g base could adopt the iphone? so, i know a certain amount of this is baked into apple's numbers, but maybe a conservative amount. i don't know, what do you think? >> jon, that's a fair point, because you mentioned the 3g network, and if you a sigh um 10% of 3g. but you have to remember the china 3g network was a failed network. it was broken. it did not work well. the extent this will be available on a working 4g standard and to the extent it gets subsidized and china mobile is doing something rather unusual in terms of subsidizing the note down to zero, if they
get the right kind of deals and support from china mobile, this could be far larger than that, absolutely. >> alex, if it laps -- happens, and if icahn gets something that satisfies him, is the door now open to some renewed multiple expansion in the stock given what's happened to the multiple in the past year? >> with the right promotions, with the right support from china mobile, and then, also, they still need to round out the product roadmap a little bit. we've got some buzz that there will be larger screened iphones next year, so they can better compete with the galaxy note series. it still would be nice to see a lower-cost entry model from apple. but if you get those things, i think, yes, we could see some go-forward multiple expansion. in the meantime, because we still don't know enough, jmp securities continues to recommend you play the component vendors that will win no matter who wins in china. names like qualcomm, avago, up 5%, very nicely after a strong quarter yesterday, skyworks or even a peragrin, in the small-cap. that's the way to play it.
>> does that enthusiasm extend to intel? >> intel has yet to prove it has a mobile strategy that can work, and also, once it does prove that strategy, it stands a great risk of multiple compression on gross margin pressures. so intel has a lot of things to get right. interesting stock from a 4% dividend yield perspective, but beyond that, we think they have to get a lot of other things right first. >> alex, interesting point of view. we'll see what the next few weeks bring. thanks again. >> thank you. let's get a "market flash" from dominic chu. celgene. >> yeah, looking at the shares, ubs is upgrading it to a stock from a neutral rating and increasing the price target to 200 bucks from $163 prior. analyst matthew roden thinks they can deliver 26% average annual earnings growth over the next four years. earlier in the week, refer, celgene made a deal to jointly develop six anti-cancer drugs, kelly. back over to you. >> thanks very much, dom. coming up next, for those of you unnerved about reports of a
consumer spending slowdown on black friday, mike holebertz says there's a silver lining for investors. he'll join us to explain what that means. also ahead, rick santelli joins us from the cme in chicago. what are you working on, rick? >> we're going to work on a comment you made. you said, i wonder if the retreat in stock is they're digging into the gdp numbers. i don't think so. but peter and i will dig into them, nonetheless. bottom of the hour, folks. [man]ask me...
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[woman]lumbar [announcer] tempur-pedic.the most highly recommended bed in america. now the fun begins! welcome back. a number of retailers out with the same-store figures for november, including the all-important black friday holiday. what do the numbers say about momentum heading into the rest of the holiday season? courtney reagan has the early report card. hey, courtney. >> good morning, kelly. right now, it seems like retailers are summing up november pretty simply, ba hum bug. they're registering as decent, but the rest of the month saw restraint spending. bath and body works the biggest drag on the month for them. not totally surprising, but naeg tiv for investors as increased promotions cut into margins. ubs's roxanne meyer sees opportunity, noting 50% of the brand q4 sales come in december. costco did improve 2% over last
year, but short of consensus. traffic, however, was up 4.25%. apparel and accessory boutique fran chefrancesca isn't inspiri. they had slower traffic in the early start to the holiday, and adjusting the fourth quarter sales outlook. guggenheim categorizes dollar general earnings good enough. not particularly inspiring, but he explains that while the low-end consumer remains under pressure, dollar general does continue to gain significant share in the large consumable category, and that's enough for him to reiterate buy for the long term. struggling teen retailer, aeropostale posting another bleak quarter, missing expectations and guidance. transactions and traffic remain weak and it's revising guidance lower again. retail metrics tracks 120 retailers, and of that sample, 41 have issued negative preannouncements. only four positive. you have 12 left to report. carl? >> probably the toughest space
to read right now, court, at least if you ask cramer. thank you so much. >> thank you. even though consumer spending did disappoint on black friday, the next guest says there's a silver lining for the markets. mark colbert is senior columnist at market watch. mark, good to have you back. >> thank you. >> interesting blog the other day, a good post about the black friday indicators that we obsess about every thanksgiving. you basically say they're worthless. >> well, that's right. there's two different ways to put it. i think the bottom line is what you just said. that if you actually look at it from a rigorous statistical point of view, they tell you basically nothing about how the stock market does from the black friday weekend through the end of the year. the silver lining is that actually, even though it's only marginally statistically significant, it turns out that there's actually somewhat of an inverse correlation. so if the market initially reacts poorly, as it has earlier this week, in the face of those
bahumbug retail reports, they tend to do better than average. i don't want to add to that, but it's a slight silver lining which is why i headlined the post. >> you went back into the '70s when we used the term black friday, and the two days after the thanksgiving period, and then how we do in december. there does seem to be a bit of a back-and-forth. >> well, that's right. i think the other thing worth pointing out is just regardless of black friday weekend, there's a seasonal tendency for the market to be strongest in the last week of the year. so i think a lot of people are -- if you actually go back and look at the tendency, people tend to be relatively cautious in the early part of the december period, from a stock market point of view, and it's only in the last week of the year that the market really recovers and makes december a decent month. if december ended right before christmas, actually december would be a relatively immedia l month of the calendar. >> you said bullish sentiment dangerously high. the stock market is not cheap. in your view, it could mean
we're vulnerable to a nasty fall. can you expand on that? >> well, that's right. that was in response to a lot of posts going around right now in the blogosphere about how if the market is up over 20% in a given year, then that increases the odds of a strong -- the following year, and there's no basis for that. i went back to when the dow was created in the late 1890s, and i found there's absolutely no difference statistically in the expectation of a strong year, than next year. so i think we need to give up the notion that just because we've got a good year this year, that means we're going to have a better than average 2014. >> mark, i know you're trying to make a point about black friday and market performance, but certainly we got information from black friday with regard to how the consumer is doing, that people can still trade off of. i wonder if there's a way of just zeroing in on what we learn as when, and then being able to turn around and say, all right, well, i want to make sure that i'm long the high net worth individual and, you know, into the end of the year, or
something like that? >> well, i mean, there very well may be ways to trade it, i'm just not aware of what they are. a lot of -- but i was focusing on those who want to focus on the overall market with regard to that, as indeed the previous piece and segment focused on. i mean, some of the retailers have a huge portion of their sales in the month of december, and here we are trying to read the tea leaves on the basis of what happened in the latter part of november. i think sh a problem we have in this business is putting too much meaning on very little data. that isn't to say there aren't people out there that comes up with good trading strategies. i'm just not aware of them. >> talking about our bread and butter. obsessing over little tidbit. mark, thank you for joining you us. coming up next, ford motor revving up the future by unveiling -- there it is -- the 2015 mustang. but what is alan mulally's future at ford? we'll bring you the highlights
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welcome back to "squawk on the street," i'm julia boorstin with news on electronic arts as shares are down more than 7% on problems with its "battlefield 4" game, part of its key franchises. it's having major issues and has since october launch. there have been issues such as the game crashing and problems accessing downloadable content that allows players to access more levels of the game. now, ea is suffering on the reports that "battlefield 4" will force them to delay future games from the developer dice and ea says they're investing to fix this problem. but work on future dice projects are on hold. back over to you, carl. >> tougher than the movie business these days. thank you so much, julia boorstin. so is he or isn't he, alan mulally, talking on the new
mustang, and whether he plans to swap ford for microsoft. phil lebeau has more on the fascinating conversation. >> hey, carl. we're here for the mustang, but a lot of the speculation regarding his tenure as ceo of ford and whether he microsoft, the news. we ask the him pointblank, has he been contacted by microsoft's board or representatives from microsoft? >> i am honored to serve ford, and we have no change in my plan. >> i understand that. you didn't answer my question. have you been approached? >> i did answer your question. i'm honored to serve forward. we don't speculate. >> here's the mustang. the 50th anniversary mustang. it's getting a fair amount of attention, not only in new york but around the world. it will be going on sale here in
the u.s. next fall. and for the first time, they'll be selling the mustang overseas. that's why they're unveiling it, also, in barcelona, sydney, australia, shanghai, china. and alan mulally says the possibility of greater sales with the mustang overseas, that's what's very enticing to him. >> we are reinventing the mustang again to not only provide that but provide it everybody around the world with right-hand drive and left-hand drive. >> look at shares of ford, since mulally became ceo in 2006, up more than 100% but like the other auto stocks, it's holding off. it's hit a plateau. there's been reporting that a ford board member said alan mulally told us he's staying through the end of 2014. i went to a senior executive. i said, did he make a guarantee he's staying? and they said, no. nothing's changed. his plan -- his plan is the same as it always has been, to stay through the end of 2014. but if he is offered the
microsoft position, or if he chooses to stop being ceo in the next couple of months, he's free to go. so technically, nothing has changed there. guys, back to you. >> very tough tea leaves to read, phil. and mickey maynor, said the only way the speculation ends is when microsoft finally makes their pick? >> reporter: right. exactly. and you know the latest reporting out of seattle is that he is one of two finalists there. if he's not a finalist, or if he's not interested, he easily could have told us, and he easily could tell others, i'm not interested in the job. but time and again, when he's been asked that very specific question, he refuses to answer it. >> that's true. it's like presidential speculation. we'll have plenty of that coming up, as well. thank you, phil. great to see you. phil lebeau this morning. >> reporter: you bet. kobe bryant just sign add two-year contract worth over $48 million. does that make him greedy? our own jane wells asked him that very question and we'll bring you his answer and more thoughting coming up later this hour. plus, the bells are about to
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negative territory and extended their losses through the session, such as they are. there is a real concern in europe that the fed could withdraw stimulus at a time when today the european central bank is highlights that the deflat n deflationary threat will remain for a long time in europe. i'll come to that in a moment. if there was one sector you could see moving to the downside, it's the retailers. we had a downgrade on the big german retailer metro today. but let's get to what mario draghi said at the ecb conference today. yes, there's no move from the european central bank on rates, though he says there was a small discussion about whether or not they should -- they should cut rates, notably the deposit rate. he also importantly said -- and i think this is key, because it's the first time we've had -- can we see mario draghi over there? we've actually had a cut in the inflation forecast for this year, and this is after they cut interest rates, of course. now they're saying that inflation will only be 1.1% next
year, and for the first time they've given us an inflation forecast for 2015, and it's 1.3%. that's dangerously close to zero if you're a central bank looking out to 2015. we'll come back to that many times in the future. in london today, the u.k. finance minister, george osborne, also gave what they call his ought imstatement. he declared to the house of commons that britain's economic plan was working. he now says that the u.k. is a result of a scarcity, going into a cash surplus. interestingly enough, he says the unemployment rate will come below 7% sooner. that's for the bank of england, trying to assure people that rates won't rise. for those of you that own a property in london, the rules are changing. if you are a foreigner for tax purposes. your non-residence for tax purposes. they'll start charging capital gains tax on residential properties when you sell. guys, back to you.
>> all right, simon, thank you so much. let's get a check on energy and commodities. sharon epperson at the nymx today. hey, sharon. >> hey, carl. we told you about the surge in natural gas on the storage data that was much more bullish than expectations. looking at natural gas continuing the rise, up almost 3%, and we're up about 10 cents on the session. we're continuing to watch what's happening with oil prices, as well, because it's a mixed picture there with brent crude down right around 11 -- 111.50 a barrel. but we're looking at the u.s. oil, the wti contract, which continues to climb here, well above $97 a barrel, and that spread between the two has come in significantly from last week. of course, we do know we did get a decline in crude supplies for the week, the first time that's happened in 11 week, but total petroleum demand is at the highest levels of the year, and that is supportive of higher oil prices. what does this mean for the pump? gasoline futures continue to climb, up about 7% so far this month. that's often a good indication
of what you'll be paying per gallon for regular gasoline. so we could see higher prices going into the holiday. and we're also watching gold, because, of course, the jobs data will be key to where gold goes from here. but we're also looking at the impact that the gdp data had on the gold market, and we're looking at, also, the jobless claims numbers, better than expected, all of that putting pressure on the precious metal, and looking at gold down about 20 bucks right now. back to you. >> thanks very much, sharon. we want to bring in bob pisani with a look at what's moving down at the big board. >> dollar pressure. even though it's not up a lot, it's killing gold. that's what's been killing the investors, the gdx, five-year low yesterday. having a problem. five days here, too, down in a row. and it's about the 10-year yield as rates have been quietly moving up. we're moving at 2.9%. rick's been commenting before that if we get over 200,000 on the nonfarm payrolls, he wouldn't be surprised to see a three handle, and based on what
we're seeing here, that's certainly accurate commentary. i would agree with that overall. there's what's putting pressure on the stock market. the rate-sensitive stocks, this is very predictable pattern, not hard to figure out. utilities, telecom, staples, housing stocks, all moving lower. the rates up, the bank stocks are benefits -- not today, because of the volka rule implementation. so chase, citigroup, bank of america, wells fargo, all of the big guys are really moving much further than the overall market right now. let's move on and talk about other things that are moving here. in the apple group. apple's at one-year high, not confirmed yet, the talk of the china mobile deal. components around apple also doing better. i think we're talked a lot about retail. i don't want to belabor the points here. a couple of things that have emerged here, that are very obvious for the holiday season. it's a shorter shopping season. there's been heavy promotions. there's been lower guidance overall.
gross margins have significantly been under pressure overall. a couple of other things, people haven't talked about this, but hanukkah is over. it's over tonight. that's a major influence. this hasn't happened for a very, very long time. and i think that will be a major factor overall. the lower guidance is really putting pressure on things, and we saw three retailers do what express did yesterday, that is lower the guidance, all of them under pressure. normally, you sell retailers going into the holiday season. this is a typical thing. this is very unusual. we're getting relatively heavy selling here. look what's happened. this is this week, some of the major names, wet seal, francesca's, aeropostale, again, the sell going into, or after a thanksgiving, fairly typical for retail. that's been going on for years. but this is really noticeable this year. 50% off. >> and seeing the headlines from some of the retailers, the weakest sales since 2009 for some of them. you just have to wonder again how much is specific and how much is general, you know, are
people spending elsewhere, or are they not having enough to spend? >> we didn't take enough of them out during the recession. still a widespread view. >> for all of the great stuff going onion line, it's certainly true. but the same 50% off is online is going into the stores. there's nothing magical suddenly happening online that isn't happening in the store. the margins are such as much under pressure online as it is in the store. >> people are picking -- >> yeah, almost waiting for that to happen at my local place, down the street there. >> let us know. that will be the sale sign. >> we'll all go out later. >> thanks, mom. let's get to rick santelli in chicago, as he promised, digging into the gdp number from earlier this morning. rick? >> absolutely. absolutely. we're going to get our pick and shovel, welcome peter bookfarr, we're lucky to have a sharp pi like peter. i see the stock market is down, maybe not at the lows. and i hear a lot of interesting
comments, our own coal kelly the reason we're not at the lows is the be w the equity numbers aren't at the low. i'm not buying it. your thoughts? >> well, we can even maybe point to jobless claims being the reason why we're touching the 2.86 level and granted holiday seasonal distortion issues, but overall, the downward trend and the pace of firings has continued over the past four weeks. what that translates into tomorrow we'll have to see. but the bond market continues to normalize. the third quarter revision is somewhat backward looking. we know there's going to be a sharp drop-off in q4. so maybe more claims rather than gdp influencing yields today. >> i gotcha. well, even the claims number, believe me, you know, 3s are wild. we're under 300,000. we may be at 3% tomorrow. over 3% on gdp. you know, moving down in claims, it's obviously not bad news, but, you know, considering things like labor force participation rate, it doesn't necessarily translate into more
jobs and, of course, we'll know more about that tomorrow morning? >> right, right, of course. and the bond market, the long end of the curve, is in a sense normalizing. whereas the fed wants the long end yields to be abnormal. so that process is in its early innings, and that will continue. while the u.s. economy is just okay, 2% okay, a yield of 1.6% over the summer was not substantia substantiated. so now we have still a 2% economy, long-term interest rates are normalizing, and again, that's a sign that the bond market is taking control of long-term monetary policy, long-end monetary policy, from the fed. >> plrt. all right. listen, i'll throw you curveballs and put in the hot seat. i remember, maybe a year ago, a little longer, when senator carl levin was doing that big hearing about goldman and some of the derivatives. do you remember watching that, peter? >> mm-hmm, yes. >> i remember i was squirming in my chair, it was so uncomfortable, because my impression was is that when
senator carl levin was talking about these issues, he looked like he was trying to describe brain surgery. and now, of course, they are crafting the portfolio aspects of the restrictions for the banks. i'm not a lover of banks, but in the end, what's wrong with a big pofl and some out-of-the-money puts in case stocks go down? i don't see the logic. the last 20 seconds, your comment. >> i won't try to bring any logic to it. they somehow think a short position is in and of itself isolated. and unrelated to anything else, which is just not reality. and it's just not how banks perform a lot of hedging-type procedures. so i can't even come close to making logic out of that. >> that's good, because you're a smart guy, and if you can't come close, all the rest of us are miles away. thanks for taking the time today. >> thanks, rick. >> the gang back at, you know, the nyse, it's all yours. >> thanks, rick. rick santelli in chicago. when we come back, if you're fluent in geek speak, you might just hear the words "you're
hired," we'll talk with the ceo of the job listings at glassdoor and a lot more in just a moment. ya know, with new fedex one rate you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.
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kill the rally. plus, a look at what tomorrow's jobs numbers could be with insight from someone who gets this run -- someone who runs background checks, and apple's been on a roll, but what could increased pressure mean for the stock? one of the 25 most powerful women in finance is here. citigroup's sunni harper joining us with the best investment ideas, and that and much, much more at the top of the hour. back to you. >> thank you so much, scott. on the heels of a stronger-than-expected gdp number, we'll get the november jobs report. with unemployment still hovering around 7%, we want to take a closer look of where the jobs actually are. robert holman is the ceo and co-founder of glass door, a free jobs and career website, which, by the way, just secured another $50 million in funding this morning. robert, good to have you back. welcome. >> thank you. good morning. >> $50 million will buy a lot of servers. benchmark's been with you, and now tiger. what's it going to be able to do for you? >> well, you know, glass door is
building trip advisor for jobs and companies. we're about helping people find jobs they love, and about companies help finding top talent in this community that we've been building. it's working amazingly well in the u.s. it's begun to work internationally very, very well, and this money will help us accelerate globally. >> you got data on nearly 300,000 companies, right? >> yeah. that's right. >> 3 million salaries and reviews, a lot of them generated anonymously, which reminds people of maybe a yelp dynamic, where you're unable to sort of control or effectively curate a real review or a fake review. how do you manage that? >> glass door, from the beginning, we've had a human touch that reveals every single piece of data that goes live. we've been extremely transparent with the -- both the user community and the employer community, to be very clear about what the rules are for what's fair game on our site and what the rules are for challenging data on our site. and we believe that what we have is a data set that is responsible and reflective of what's happening in the community.
and if you read the reviews of a company, it really is pretty magical. i mean, you get a good sense of what it's like to be at nordstrom's during the christmas rush, at google during a product release. it works. >> and it becomes so important, robert, for companies to see what's being said about them to have access to this data to some extent, and is that really the business model here? >> well, the business model is fundamentally about helping companies hire. so at the end of the day, people are researching their next job, something that they aspire to. >> because isn't that -- just to jump in, isn't that the linkedin claim? i mean, to what extent are you ultimately going to play in the same space, becoming perhaps a competitor or a successor to what has been a very successful company in this regard? >> you know, in many ways, we're cousins to linkedin. we're a complementary service. linked about in finds the needle in the haystack hire. even if you find someone at linkedin, people will come to
glassdoor. glassdoor is about jobs and companies. >> where's the sweet spot for job openings right now? where is it? >> what we're really seeing is a tale of two economies, frankly. we are seeing a tremendous demand for highly educated, highly skilled jobs with a strong service component. so engineering. oil. financial services. and candidly, you know,er we're seeing that at levels we haven't seen almost since the late '90s. you know, we're almost reaching crazy levels, in terms of the bay area, for the war for engineering talent, and contrast that with the unskilled portion of the economy, which is not nearly enjoyed the recovery that the skilled portion of the economy has. and that is why, you know, unemployment has stayed above 7%, compared to the did, you know, under 5% that it was the last time that we sue this kind of crazy competition at the high end. >> yeah. saying that on a day when we're
seeing protests around the country, arguing for minimum wage at fast-food restaurants, for instance. the last question, robert. yoo you are a veteran of expedia. you're a veteran of hotwire, of microsoft. everybody's tossing around whether or not mulally is going to go to microsoft or not. would he fit in the culture if he did? >> you know, it's a good question. microsoft culture is a very, very specific culture. i think it's going to be very challenging for almost anyone who hasn't been a part of that culture before or related to it to fit in. now, that may be what it needs to really shake it up. >> yeah. >> so mulally may be able to do that. i do personally think the safest play will be to find someone very, very aggressive, who sees the problems and where it needs to change. but which also has had one foot in that culture during this imtoo. >> yeah, i think that argument probably resonates with a lot of people who have worked there before. robert, good to see you again. thank you so much for your time. >> great, thank you.
>> robert holman with glassdoor. let's send it to dominic chu for the "market flash." we're looking at smucker's? >> yes. wells fargo downgrades to an underperform from a market perform, or neutral rating, lowering the price target to $92 to $94 a share. it says it thinks single-serve coffee is slowing and expressed concern and caution about the overall consumer environment, so those sjm shares, kelly, down on that bit of news. back over to you. >> i'm seeing a theme today, dom, between the retailers and smucker's. thank you. just one week ago, kobe bryant signed a massive $48 million contract to stay with the lakers. does that make him greedy? jane wells asked him. take a listen. >> some people think you're greedy, and -- >> no, that's -- >> -- a disadvantage to the team. >> i guess that's making a smart business decision. >> plenty more of jane's conversation with kobe bryant. keep it right here. americans take care of business.
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nba star kobe bryant making his way back from what could have been a torn achilles heel last year. it did not stop the lakers from giving him a massive new contract worth about $48 million over two years. our own jane wells spoke with breent, and she joins us in l.a. with more. hey, jane. >> reporter: good morning, carl. we met at first to talk about this. a really big shoe, a really big departure, getting really divided reactions.
it's a super high top, flexible here. and for the first time, it's using nike's woven flyknit tops in a basketball shoe. bryant unveiled the kobe nines which won't hit stores until february, and cost $225. he said boxing shoes inspired him and he decided to go back to the high top before injuring his achilles. he said he will not play friday. it's been eight months since he signed, which brings up the fact he signed a $48 million, two-year contract. some have criticized that. are the lakers making the business decision to keep kobe happy, at the expense of not affording a winning team. >> it's got to be a combination of both, because they know i absolutely will not tolerate losing, and they know that. what they've done is they've looked at -- found a balance -- >> do you think so? can they afford to build the team around you? >> for sure. for sure. that's something they planned and mapped out, and we have to
go through it. i wanted to know what option a was, what's option b, what option -- what is option c. and we can sit down and have that intellectual conversation about where this organization is going and where we plan on going. that's something they gave a great amount of thought to, so once they presented the offer, it wasn't a negotiation, it was okay, i see your option a, b, and c, let's do this, let's move forward. >> some people think you're greedy. >> oh, that's -- >> a disadvantage to the team? >> i guess that just means i'm making smart business decisions, because most people make smart business decisions are greedy anyway. >> no apologies there. later on "street signs," kobe's long-term business plans and why is he doing commercials for turkish airlines? guys? >> jane, you have to say west coast basketball doing better than we're doing out here in the east right now, anyway. >> well, the lakers aren't doing so well, but maybe once kobe gets back on the court. >> yeah, maybe it'll be the shoes. jane wells, thank you so much this morning. jane, thanks. how would you like the chance to win cnbc history? guess what? now you can. it's as easy as nailing the number that is the jobs report
that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. ♪ welcome back to "squawk on the street." wells fargo is maintaining
jcpenney underperform or sell rating on the stock, saying the 10% climb in november sales may be as good as it gets toer this retailer. the firm cautions that there are -- many are likely to misread the magnitude of the acceleration of the sales trend. so jcpenney turning things around, carl, but maybe in this case, a skeptical eye from wells fargo. >> all right. a good one. thank you, dom. you may remember that prior to our move to this lovely set here at post 9, we used to be up on the balcony overlooking the nyse trading floor. there's a shot of where we used to be and where we still do some of the prep before the show. with that in mind, we have the perfect prize for any cnbc junkie who can nail the jobs number tomorrow. just tweet us your predictions for november non-farm payrolls. you get a chance to win this. what kelly is holding. it's a piece of our old set, autographed by the "squawk on the street" gang. it's actually a plexiglas -- >> it is surprisingly heavy, i have to say. this must weigh 20 pounds? >> yeah. maybe. i don't know who's going to get it to the winner. but somehow. >> delivered by amazon drone. >> by drone.
signed by the "squawk on the street" gang. use our handle, @squawkstreet, and #nailthenumber. you have until 8:30 tomorrow to submit the suggestions. a lot of them coming in hot. >> i know. >> 283. 290. >> it makes me want to guess 1240. >> really? >> as i was just tweeting, one says, there's so much upward momentum that people want to believe in the sustainable story for 2014, that anything above 100,000 would probably be -- will you hold this a second? i think i have to sign -- >> is it that heavy? oh, you're going to sign it. >> yeah. okay. ready? >> this will not play well on live tv, because it's very hard to see. >> but it's there. >> poor penmanship. by the way, a couple of stocks to watch. microsoft is getting our attention now. down 1% earlier. of course, our interview with alan mulally, phil lebeau's incredible reporting, taken wind out of the idea he will go to microsoft, and that is the biggest decline for the dow component since july.
of course, coming off a fresh 13-year high yesterday, kel. >> no problems still raising capital. borrowing at rates -- with a rating, i should say, stronger than u.s. government. >> one to keep an eye on. of course, jcp, as dom pointed out before we signed the piece of plexiglas. we'll see you on "closing bell." >> yes, we will. let's get back to headquarters and scott wapner and the "halftime." >> thanks, guys, so much. to the core. what does apple's deal with china mobile and battle with carl icahn mean for the stock's recent breakout? power broker. citi's sunni harper is here live on where the best bang for your buck really is right now. we do begin with rates to rally and the reason why stocks can still go higher. more signs today of an improving economy sending the 10-year closer to 2.9%. the move coming after a nice drop in jobless claims and an upward revision of gdp. so stocks are trying to battle back from that four-straight down days. so our question to the traders becomes this -- if rates are rising for the right reasons